Community Reinvestment Act

BuckleySandler advises a wide range of financial institutions on Community Reinvestment Act (CRA)-related issues, including matters that arise from the intersection of CRA and fair and responsible lending compliance. CRA has become even more important recently for several reasons. First, it has been part of the debate regarding the current financial crisis, particularly whether banks’ CRA obligations contributed to the current crisis. Second, recent DOJ enforcement actions have alleged that banks have delineated their CRA assessment areas in a racially discriminatory manner. Finally, fair and responsible lending issues are being used to downgrade CRA ratings and restrict financial institutions’ ability to expand through branch growth and merger and acquisition activity. 

BuckleySandler offers cutting-edge regulatory guidance with an integrated view of how CRA and fair and responsible lending interact, as well as practical advice on cost-effective ways to implement successful CRA compliance programs. Counsel Warren Traiger is a nationally recognized CRA authority, who has testified on CRA before Congress and the federal regulators and served as the New York Banking Department’s Special Counsel for CRA. Mr. Traiger has counseled retail, wholesale, and special purpose institutions on CRA compliance and has represented banks on CRA and fair and responsible lending issues before regulatory agencies and in court.

Among the CRA services we provide are:

  • CRA Risk Assessment. Reviewing and preparing a detailed assessment of CRA compliance that not only contrasts a client’s lending, investment and service activities against past performance and the performance of its peers, but also reviews potential fair and responsible lending vulnerabilities that may arise from a bank’s assessment area delineation(s), branch locations and/or marketing strategy.
  • Examination Preparation. Preparing responses to first day letters, including establishing a CRA performance context, and interfacing with regulators throughout the examination process.  Our extensive knowledge of CRA legislative and regulatory history and ability to design and oversee appropriate quantitative analyses help put a bank’s CRA compliance in the best possible light and establish the parameters of an examination.
  • Enforcement Counsel. Aggressively responding to negative CRA findings before a bank regulatory agency, the U.S. Department of Justice, or in court.  We use sophisticated legal and quantitative analyses to defend a client and counter determinations that could result in a downgrade of a bank’s CRA rating and threaten a client’s business plans, whether a determination was based on inadequate CRA performance or a finding of non-compliance with fair and responsible lending laws.
  • Merger and Acquisition Counsel. Drafting and defending the CRA and fair lending (“convenience and needs”) portions of M&A applications submitted to federal and state regulators.  We work with bank holding companies and their primary counsel to develop a strategy on navigating the regulatory process and responding to public comment or protest on a bank’s application.
  • Planning. Assisting de novo and existing banks delineate their CRA assessment areas and establish specific and defensible lending, investment, and service targets.  We identify a client’s peers and analyze their CRA performance in order to establish benchmark levels of satisfactory and outstanding compliance.
  • Wholesale, Limited Purpose, and Special Purpose Designations. Counseling banks on whether they are likely to be designated as a wholesale, limited purpose, or special purpose institution.  We have prepared numerous successful applications for clients seeking designation as wholesale or limited purpose institutions.
  • Strategic Plans. Working with banks to design and draft CRA Strategic Plans and providing counsel throughout the public input and regulatory approval processes.  
  • Data Submission. Working with banks to gather and evaluate CRA-relevant loan data from various business units, organize the data in the appropriate format, and file the annual CRA report.  We also provide counsel on the reporting and public disclosure requirements for certain written agreements covered by the CRA Sunshine Rule.
  • Qualified Investment Evaluation. Sourcing and evaluating potential CRA investments based on a bank’s return objectives, risk tolerance, investment horizon, liquidity needs, and other constraints.  We also assess whether potential investments are likely to be deemed “CRA-qualified.”
  • Qualified Investment Structuring. Counseling hedge funds, mutual funds, and other investment entities on how to enhance the likelihood that banks will receive CRA credit for their investments. 

BuckleySandler also offers a comprehensive array of services that are specifically designed to help lenders comply with federal and state Fair Lending laws. To learn more about our Fair and Responsible Banking practice, click here.